A pedestrian is reflected in an electronic board showing the graph of the recent fluctuations of Japan's Nikkei average outside a brokerage in Tokyo
Thomson Reuters
TOKYO (Reuters) - Asian stocks dipped and the dollar marked time on Wednesday, with markets fixed on the Federal Reserve's policy statement due later in the session for clues to when the Fed will hike interest rates.

A Fed statement is due at 1800 GMT (2PM EDT), followed 30 minutes later by a news conference with Chair Janet Yellen.

Financial markets are most interested in whether the U.S. central bank will remove the word "patient" from its remarks on raising rates.

A number of strong U.S. employment reports have increased wagers over the past few weeks on the Fed tightening as early as June.

The prospect for a summer hike have caused the dollar's peers to tumble, triggering tumult in emerging market equities and driving up and U.S. debt yields.

Euro zone bond yields, meanwhile, sank to record lows as the European Central Bank implemented its quantitative easing program.

"The FOMC (Federal Open Market Committee) meeting could well produce some passing volatility but have little net impact, given that policy is sure to be on hold, while Chair Yellen should use plenty of caveats on the policy outlook in her press conference," Sean Callow, a senior currency strategist at Westpac in Sydney, wrote in a note to clients.

Traders work on the floor of the New York Stock Exchange, as a television screen displays Federal Reserve Chair Janet Yellen testifying before Congress, February 24, 2015.
REUTERS/Brendan McDermid
"The removal of the word 'patient' from the statement has been so well flagged that it would be a true shock (slamming USD) if it is retained."

The euro was steady at $1.0597, having crawled back from a 12-year low of $1.0457 plumbed on Monday as dollar bulls held back before the Fed's statement.

The dollar index, which advanced to a 12-year high above the 100.00 threshold over the past week thanks largely in part to the euro tumbling on the ECB's quantitative easing scheme, stood little changed at 99.607.

The dollar was flat at 121.34 yen, having been confined to a narrow range after touching an eight-year peak of 122.04 last week.

In commodities, U.S. crude oil lingered near six-year lows as fears of a large inventory pile buildup added to the prospect of more oil entering the market if sanctions on Iran are dropped on a nuclear deal being done. [O/R]

U.S. crude was down 74 cents at $42.72 a barrel, in reach of the six-year trough of $42.41 struck overnight.

(Editing by Eric Meijer)

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